Employers See More Burden than Benefits from Health Reform

July 22, 2011 (PLANSPONSOR.com) - Thirty-seven percent of Lockton Benefit Group clients responding to a survey said the increase in employee wellness incentives is the most beneficial element of the health reform law.

Other benefits cited include: 

  • Exchange access for part-time employees – 31%, 
  • Exchange access for pre-65 retirees – 23%, and 
  • Option to terminate coverage, knowing employees will have other options – 16%. 


However, 93% of respondents indicated they are at least somewhat concerned over additional administrative obligations. More than half (56%) said new reporting and disclosure obligations will significantly increase their administrative responsibilities. Employers reported, on average, that it will cost $1 –$3 per employee, per new notice issued if the notice cannot (under federal rules) be distributed electronically.  

Other concerns cited include: 

  • Potential impact of the employer “play or pay” mandate in 2014 – 84% at least somewhat concerned, 
  • Cost impact of 2010-11 benefit mandates (elimination of dollar maximums, coverage of adult children, etc.) – 80%, 
  • Potential cost impact of automatic enrollment requirement in 2014 – 80%, 
  • The “Cadillac Tax” excise tax on high value coverage in 2018 – 77%, and 
  • $2,500 cap on health flexible spending account benefits in 2013 – 70%. 


Less than half (45%) are at least somewhat concerned over the potential impact of non-discrimination rule applicable to insured medical coverage.  

Options employers said they will consider when the “play or pay” mandate begins in 2012 include using a “look-back” period, preferably 12 months, to attempt to manage to an eligible class of employees substantially similar to today’s class (53.5%); reducing the actuarial value of the group health plan (higher deductibles, higher coinsurance percentages, higher copayments, etc.) (46.1%); reducing employer contributions for dependent coverage (44.8%); and reducing employer contributions for employee coverage (44.7%).  

Nearly two in 10 (18.8%) said they would consider terminating their group health plan and paying penalties to the insurance exchanges. However, 86% said they will likely continue to offer group coverage in order to attract and retain the talent.  

The survey results can be viewed from here.